A, B and C were partners sharing profits and losses in the ratio 3 : 2 : 5. B retired and the new ratio between A and C became 5 : 3. Goodwill of the firm was valued at ₹3,00,000 and it was decided to treat goodwill without opening a goodwill account. By what amounts will the capital accounts of the partners be debited or credited on B’s retirement?

Correct option is C

Since the firm decided to treat goodwill without opening a goodwill account, the adjustment is made through capital accounts using the raise and write-off method.
Step 1: Raise Goodwill in Old Ratio (3 : 2 : 5)
Goodwill = ₹3,00,000
Old ratio distribution:
· A = 3/10 × 3,00,000 = 90,000 (Credit)
· B = 2/10 × 3,00,000 = 60,000 (Credit)
· C = 5/10 × 3,00,000 = 1,50,000 (Credit)
Step 2: Write Off Goodwill in New Ratio (A : C = 5 : 3)
Goodwill (₹3,00,000) is written off between A and C:
· A’s share = 5/8 × 3,00,000 = ₹1,87,500 (Debit)
· C’s share = 3/8 × 3,00,000 = ₹1,12,500 (Debit)
Step 3: Net Effect on Capital Accounts
A’s Net Adjustment: Debit 1,87,500 – Credit 90,000 = Debit 97,500
C’s Net Adjustment: Debit 1,12,500 – Credit 1,50,000 = Credit 37,500
B’s Net Adjustment: B is only credited his goodwill share = Credit 60,000
Thus, the final adjustment is:
A → Debit ₹97,500 B → Credit ₹60,000 C → Credit ₹37,500
Therefore, the correct answer is option (c).